ZLATO - príprava na druhý test úrovne $725

Gold will test the $725 an ounce, and make a little higher high as dollar drops for now – should you buy more, hold or go short at that time?

Dollar is showing weakness. It can drop in the next few weeks and months. Gold is heading for a rally that will definitely test the high of the last year. At that point the dilemma comes – what to do?

The answer to that million-dollar question lies in the way dollar will behave. If dollar holds its ground above 80-81 areas in Dollar index, Gold may not be something to hold $725 an ounce. On the other hand if dollar crashes, then gold will move towards $1000 an ounce.

Normally, even if some commodity or financial instrument is in bull market, it takes out a resistance on the third attempt. This will be gold’s second attempt. Smart invertors will sell at the high and then wait and see the action from the sideline. All eyes are dollar.

The massive negative capital outflow from US, the budget and trade deficits, weakening US economies all point to weaker dollar. There is one bright spot for dollar – the sentiment. For a long time many brokers, hedge fund managers and investment advisors are bearish on dollar and bullish on gold. Most likely gold will attempt a new high and fail. US Dollar will test the low and bounce back in a new bull market.

Source: IndiaD

19.02.2007

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value."   Alan Greenspan